Do I have to pay taxes on sweepstakes prizes is a question many winners ponder after hitting the jackpot. The answer is yes, in most cases, sweepstakes winnings are considered taxable income by the Internal Revenue Service. This means that if you win a contest or lottery, the value of your prize must be reported on your tax return. It’s essential to keep accurate records of your winnings and any related expenses. Additionally, depending on the amount won, you may be subject to federal and possibly state taxes, so consulting a tax professional can help you navigate your obligations efficiently.
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